As Canadians return to the office, homebuyers are showing more interest in major cities<\/a><\/strong>\r\n <\/div>\nFor example, Statistics Canada\u2019s Demographic Division counts all expired non-permanent resident visa holders as having left the country 30 days after their visas\u2019 expiration. However, during the pandemic, non-permanent residents with expired visas were allowed to stay in the country through extensions, meaning those individuals are not included in any official statistics, but still need housing. In another case, Tal and Judge stated that CMHC calculations assume the same headship rate for new immigrants, non-permanent residents and long-term residents.<\/p>\n
By Tal and Judge\u2019s guess, current housing demand is undercounted by 500,000 households.<\/p>\n
Industry faces limitations to meet promises for housing<\/h3>\n
By undercounting the demand for housing, the Canadian supply issue \u201cis real and needs attention.\u201d While there is no lack of ideas to create housing, not enough attention is being paid to the fact that the industry\u2019s means to reach higher housing targets is limited, Tal and Judge explained.<\/p>\n
One prong of the issue is the increase in the average time for construction completions.<\/p>\n
\u201cIt takes twice as long to complete both low-rise and high-rise units today than it did two decades ago. And a lack of labour supply is a major cause of those delays,\u201d said the report. \u201cWhile large developers are usually able to secure their own labour pool, that\u2019s not the case for mid-sized and small operators that account for 30 to 40 per cent of activity.\u201d<\/p>\n
Large-scale infrastructure projects have increased competition for labourers, a challenge that has been heightened thanks to shortages caused by COVID-19. Employment in the construction industry didn\u2019t reach pre-pandemic levels until January 2022, much slower than residential investment, which recovered by Q3-2020. Meanwhile, few of the 400,000 new immigrants that arrived last year worked in construction.<\/p>\n
![\"By](\"https:\/\/www.livabl.com\/articles\/wp-content\/uploads\/2022\/05\/housing-demand-cibc.jpg\")
<\/a>Graph: CIBC Capital Markets<\/em><\/p>\nHigher costs to build, supply chain disruptions and higher fuel prices have also contributed to construction costs during the pandemic. Since 2015, the cost of construction in Toronto has jumped 46 per cent while the price of a new condo unit has increased 42 per cent.<\/p>\n
\u201cThat narrowing in profit margins is starting to impact supply by making developers think twice before committing to projects. Higher interest rates will add to development costs, while at the same time it will work to reduce demand,\u201d said the economists.<\/p>\n
\u201cWithout a dramatic reduction in the cost of construction, look for overall new supply to soften notably in the near future,\u201d they added.<\/p>\n
![\"Some](\"https:\/\/www.livabl.com\/articles\/wp-content\/uploads\/2022\/05\/cibc-demand.jpg\")
<\/a>Photo:\u00a0Volodymyr Kyrylyuk<\/a> \/ Adobe Stock<\/em><\/p>\n